Verizon, at&t agree to stop 'cramming' on customers' bills [telecom]

Regarding this posting and linked article, I have always wondered about this:

----- Original Message ----- From: "HAncock4" Subject: Verizon, at&t agree to stop 'cramming' on customers' bills

Is there expertise in the newsgroup readership as to how cramming works, technically? I gather it's not like billing for carrier interconnection (not that I understand that, either).

The 'simplest' how-it-works explanation is that a 3rd-party service provider sends the telephone company a list of phone numbers, and the amounts to be billed against those accounts. The telco gives the provider that money (less a 'service fee', for doing the billing/collection) and bills the telco subscriber 'as directed'. If the subscriber disputes the charge, there is a 'chargeback' mechanism, but things get really messy.

Historically, there is a _LONG_STANDING_ industry practice of letting 'select' third parties bill through your telephone bill for the services of that third party. I'm not sure _when_ 'Ma Bell' and Western Union came to the 'special agreement' whereby you could phone the local Western Union office, dictate a telegram, and have it billed to your telephone account. WU was one of a very small number -- possibly the only one -- of 'outside' providers with this special billing arrangement.

Ma Bell also offered some 'specialty' on-demand services that could be billed on the phone bill -- conference-call bridges, translation, transcription services, and the like.

Comes the 'divestiture' boondoggle, and it was ruled that (a) 'Ma Bell', in it's "regulated" operations, could *NO* offer such 'enhanced' services, and (b) the 'regulated' side had to provide 'equal access' to competitors of the telco's 'unregulated' service offerings.

Since the telco 'unregulated' division could bill on the phone bill, it was held that 3rd-party providers _also_ had to be given that capability.

In the early days, the mechanics of the process were that the 3rd-party services provider wrote a computer tape with the billing info, and sent it to the telco's processing center.

Also in those early days, the situation was rife with fraud and large- scale scams, with the telco caught in the middle. _They_ had already paid the scammer, and couldn't recover the money paid out, so (oddly enough) were very reluctant to 'refund' those bogus charges to their subscriber. Telcos could, and _did_, disconnect your service if you failed to pay those 3rd-party charges.

It took several rounds of revisions to the relevant regulations to get the situation 'mostly' under control.

Today, 3rd-paty billers don't get any money _until_ the subscriber pays the 'phone bill', in full. In addition, telcos cannot disconnect, or pursue 'collection', over disputed 3rd-party charges; they are just bounced back to the originator, who has to do all the collection/enforcement themselves.

And, I believe, significant restrictions were imposed on 'who' can now do such billing. It may involve posting 'substantial' surety bonds, and/or have an 'established' business record (which would eliminate the newly- established 'fly by night' operators). I _think_ the 3rd-party biller must also, now, have explicit _written_ consent from the telco subscriber, a -signed- document specifying the nature and amount of the charges that are 'authorized'.